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Branded Chocolate - India

December 2008

Executive Summary
Estimated worth USD XX mn in 2008 & USD YY mn in 2009 a% of products sold are priced in INR X Y range Profit Margins range between a b%

Market

Drivers & Challenges

Drivers: Opportunity to expand due to low penetration, strong tradition of gifting sweets, attractive pricing driving volumes, demand from new segments Challenges: Inflationary pressures on raw material prices, lack of government initiative, and duopolistic element of the market Changing palate of consumers from Indian sweets to chocolate Growing distributional channels Foreign brands targeting a niche premium segment Major retailers foraying into the industry

Trends

E L P M A S
BRANDED CHOCOLATE INDIA.PPT

Competition

Market is dominated by A and B X and Y are other domestic players Foreign players in the market are U and V, catering only to the premium segment

Market Overview Drivers & Challenges Trends Competition Key Developments

BRANDED CHOCOLATE INDIA.PPT

The branded chocolate market is growing with the bulk of sales concentrated in mid-price range products
Overview
Chocolate represents approximately c% of the confectionary market in India with the rest accounted by sugar confectionary Industry estimated to be worth approximately USD XX mn in 2008 Market is expected to grow to approximately USD YY mn in 2009

Size and growth (estimates)

USD mn
400 300 200 100 0

b% a% Y

Characteristics

Urban markets account for the major share and also for a higher penetration rate of ~a% Various price points exist with the mass market existing in INR 2 INR 10 range Profit margins range between u v% based on the price point of the product

E L P M A S
BRANDED CHOCOLATE INDIA.PPT

2003

2006

2009

Price points and consumption

Price points (INR) vs. sales
2 5 - 10 u% Rural b% v% a% Other w% Urban

Consumption

Source: 4

Drivers & Challenges

Challenges Drivers
Sweet taste preference in an underpenetrated market Tradition of gifting sweets Attractive pricing Innovation through brand and product variants Soaring price of raw materials High excise and import duties High entry barriers due to duopolistic market

BRANDED CHOCOLATE INDIA.PPT

Key Trends

Shift in consumer preferences

Driven by marketing initiatives, consumer preferences are slowly changing in favour of chocolate

Channel Trends
Independent retailers are the largest channel but modern retail is growing faster

Trends

Foreign brands target premium market

Foreign or imported brands are successfully targeting the lucrative premium segment in urban markets

Possibility of private labels

Retailers may launch their own chocolate brands in a bid to grow their private label sales

BRANDED CHOCOLATE INDIA.PPT

X is the market leader followed by Y, which dominate the market with a collective share of more than a%
Major Players
X is the leading player
X is planning to increase sales by a-b% by 20-Y accounts for over a% of the market Z and other chocolate wafers constitute b% of the total chocolate market and have been growing at c% annually Company Y b% Others c% Imported d%

Estimated Market Share

Recent foreign players in the market

U in a JV with V , and W currently catering to the premium segment only

Other domestic companies are Y and Z

Parameter
Revenue Market Size Price range Brands

X
a% INR x-y A,B,C,D

E L P M A S
Y
b%
BRANDED CHOCOLATE INDIA.PPT

a% Company X

INR XX crore(20--)

INR YY crore (20--) INR y-z U,V,W

Source: 7

Thank you for the attention

The XXX report is a part of Netscribes ABC Industry Series. For more detailed information or customized research requirements please contact: Natasha Mehta, CFA
Phone: E-Mail: +65 9651 6382 natasham@netscribes.com

Subhash Chennuri
Phone: E-Mail: +91 98190 59664 subhashr@netscribes.com

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